Food is a luxury: Turkey struggles to survive as inflation hits 74 percent

At noon, the doors of the Istanbul City Diner open, and people begin to trickle in. These are students and retirees, housewives and hospital workers, white-collar workers and shop owners. All of them are drawn to the restaurant by the promise of cheap, healthy food that costs less than $2, defying Turkey’s astronomical inflation.

“We just graduated and they immediately cut off our ration cards,” says Ege Uretman, a 23-year-old medical student who waits patiently in line for a meal of chicken stew, rice, soup, salad, a piece of bread and bottle. of water for 29 Turkish lira, about £1.40, the price of a cup of coffee in nearby restaurants.

This is a phenomenal deal, dating back to before the Turkish Lira began to plummet in value. It has collapsed from about 5 lire a pound five years ago to more than 20 today. Officially, product prices have doubled over the past year. Unofficially, they soared even higher.

“Now it’s very difficult,” says Uretman, who lives in a cramped apartment with fellow students. “The main problem is the economy.”

Inflation in Turkey last month officially hit a two-decade high of 74 percent, although independent economists peg it at 160 percent, the highest in nearly a quarter of a century. This meant increased costs for food, housing, clothing, transportation, and health care. Inflation has destroyed the savings and erased the dreams of people who are focused on daily survival.

“Five years ago, buying food was not a luxury; now people who are poor and in dire straits are unable to pay for food,” says Hasser Fogo, a poverty expert who advises the opposition Republican People’s Party (CHP). “They are unable to pay for a normal apartment. They cannot pay for natural gas. They can’t buy meat or milk, they only manage single packages of pasta.”

Inflation created many social problems that will undoubtedly change lives for years to come. Parents cannot afford infant formula for their children. Children are dragged from school to work. Fogo described a pair of siblings, aged 12 and 16, who went outside to sell water to help their struggling family make ends meet. A motorcycle hit a 16-year-old girl, pinning her to the bed and worsening the difficult situation in the family.

Muzafer Gul started working for a gas company during the pandemic, installing gas meters and cutting off the supply from households that didn’t pay their bills. Work has been hectic from the start, but he said the pace has steadily picked up since the start of the year. The work is both mentally and physically draining, he said, as more and more Istanbulites fall behind on their bills.

“People have complained a lot on social media, both about the high cost of living and, of course, about rising prices,” he says.

Complications often affect the most vulnerable sections of society, creating a cycle of despair. Poorer women can no longer afford tampons, making it harder for them to go to work or school. Clinics that used to give out free birth control can no longer do so, increasing the risk of unwanted pregnancy. People refuse important medical care or medication, leaving illnesses untreated. Meat, fish and chicken are becoming unaffordable for the poor, but inflation has affected the middle class as well.

“It means living standards are falling and poverty is rising,” said Timothy Ash, an economist at London-based asset manager Blue Bay who specializes in Turkey.

Complications in the supply chain and rising fuel prices have exacerbated inflationary problems around the world. But Ash, who follows the Turkish economy closely, blames much of Turkey’s inflation on the rule of President Recep Tayyip Erdogan. Erdogan has challenged macroeconomic fundamentals by insisting that low interest rates will moderate inflation, a view not generally shared by economists. As a result, the focus has been on keeping interest rates relatively low and credit availability in an attempt to stimulate growth.

“Inflation affects everyone, and everyone feels it,” Ash says. “It is difficult to feel the difference between three to four percent growth and six percent growth. But everyone is experiencing 75 percent inflation.”

Gorka wreaked havoc on wage earners and pensioners. The government recently increased the minimum monthly wage by 30 percent to 5,500 lira, equivalent to about $327. In December, the minimum wage was increased by another 50 percent. But the current minimum wage remains below the poverty line, according to economists.

Labor laws in Turkey are poorly enforced and unemployment is high, and companies feel they have an advantage. Many employees are forced to pay back any salary increases and are hesitant to demand what they are owed. The country was recently ranked among the 10 worst countries in the world for workers’ rights. “Workers are fired every day because they join unions and demand their rights,” said Arzu Cerkezoglu, president of DISK, a left-wing trade union group in Turkey.

Many Turks hoped that the fall in the value of the lira, combined with easy credit, would boost exports and boost industry, create jobs and jump-start the economy. But Turkish manufacturers rely heavily on imported raw materials and parts, the cost of which has also increased.

The family-run By Tanas Shoemaking factory in Istanbul opened last year, spending about 70 Turkish lira on raw materials for each pair of shoes. Now the price has more than doubled to about 150 per shoe. While Turkish wholesalers can only pay around 140 for a pair of shoes, customers are looking for even lower prices, says Ayşe Tanas, co-owner of the factory. So far, she has stopped producing new shoes.

“This whole month has been a dead season for us,” she says. “If they can’t afford food, clothing is not a priority.”

The shoes can fetch around $15 (£12) a pair abroad in countries such as Algeria, Azerbaijan and the Balkans, but the war in Eastern Europe has drained two of the Turkish shoe industry’s most profitable export markets in Russia and Ukraine, as well as transport costs and export-related bureaucracy eat into profits.

As in other industries, large politically connected conglomerates dominate Turkey’s trade show exports, crowding out smaller players like By Tanas, who are struggling to make ends meet.

“Big companies, when they get into trouble, get tax breaks and debt relief, but smaller companies don’t get those benefits,” she says.

High inflation has eroded public trust in government institutions. According to the poll, only about a quarter of Turks believe the official statistics, while more than two-thirds put more faith in unofficial higher figures, which peg inflation at 160 percent. The surge in prices has had political ramifications, with polls showing Erdogan well behind several leading opposition politicians, including Istanbul Mayor Ekrem Imamoglu, ahead of a 2023 election.

Istanbul City Hall’s experiment with subsidized meals began last month as part of a series of potentially politically motivated projects aimed at providing aid and building goodwill ahead of the vote. Other projects include low-cost kindergartens for working parents and subsidized dormitories for university students.

The lunchtime crowd at City Diner gives an idea of ​​how widespread the crisis has become in Turkey. Among them are families with children, an elderly woman in a traditional headscarf, a lawyer on his lunch break and a hipster in a black Metallica T-shirt.

“Our target category is students, people with the minimum wage and those who earn less than it,” says Murat Yazici, the deputy mayor who oversees the eatery. He says the mayor’s office hopes to open at least nine more such restaurants by the end of the year, spreading them throughout the city of 16 million.

Yazici acknowledges that subsidized restaurants, housing and daycare could add to the city’s budget, but suspects they will end up costing less than the social and health problems caused by inflation.

“We don’t think we’re going to solve poverty with our urban eateries, but we’re trying to reach as many people as possible with all our different services. “We know that we will not stop the hunger. But we have opened urban canteens to at least temporarily alleviate hunger along with other problems arising from it.”

Naomi Cohen contributed to this report.